Criminal Breach Of Trust In IPC

Today’s world would come to a standstill if there were no interconnectedness or interdependence of people on one another for their co-existence. All activities that sustain life and protect life, liberty, and property are dependent on some form official website of trust. In legal terms, a trust is a relationship in which one party holds the property on behalf of and for the benefit of another in exchange for some consideration. When there is a dishonest breach of that trust, causing not only severe financial loss to the other party but also leading to abuse of power and responsibility delegated to the person so entrusted, the offence of ‘criminal breach of trust is said to have been committed.

The offence of Criminal breach of trust is similar to offence of ‘embezzlement’ in English Law. It finds mention in Section 405 of the Indian Penal Code, 1860 in chapter XVII, which deals with offences related to property. The concerned section reads as under:

“Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits “criminal breach of trust”.”

From the above definition, the following relevant details may be stressed to classify an offense as ‘criminal breach of trust’-

1. There must be an entrustment of property to a person or dominion of a person over the property.
2. There must be dishonest or criminal misappropriation, which is covered under Section 403 of IPC, OR
3. There must be the conversion of the property for the personal use of the accused (In the definition, the terms ‘converts to his own use’ imply that the property is used or dealt with in violation of the owner’s rights[1].), OR
4. There must be dishonest disposal of the property.
5. Such misappropriation/ conversion/ disposal must be in contravention to directions of law, departmental directions, statutory rules, practices, or an express or implied legal contract between the parties.
6. Here, the terms ‘or wilfully suffers any other person so to do’ means wilfully or knowingly or voluntarily allowing any other person to do the above acts of dishonest misappropriation/ conversion/ disposal of property.

Further, the explanations to the section state that employers are also governed under the section and can be made liable for criminal breach of trust where provident funds and family pensions (as per Section 17 of the Employees Provident Funds and Miscellaneous Provisions Act, 1952) and Insurance funds (as per the Employees’ State Insurance Act, 1948) are deducted from employees’ salary but are not paid later on to the employees. It would be considered to be dishonestly misappropriated /converted/disposed of. The section applies because the employer is said to be ‘entrusted’ with the assets or property (money) of the employees.